Who Leaked the Panama Papers? And Why?

Wed, 20 April 2016

Who leaked the Panama Papers, what was their motivation and what effect will the revelations have? There are no clear answers to any of these questions, but some ironic patterns are already beginning to emerge.

As the British newspaper The Guardian explained, the Panama Papers were the largest ever data leak or hack of no less than 11.5 million files from the world’s fourth biggest offshore law firm, Mossack Fonseca. No less than 143 prominent politicians around the world were directly or indirectly implicated in secret money investments or flows, though by no means necessarily illegal ones, exposed in the leaked documents.

According to The Guardian, “The records were obtained from an anonymous source by the German newspaper Sueddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists (ICIJ). The ICIJ then shared them with a large network of international partners, including the Guardian and the BBC.”

US intelligence could certainly have been behind it. But so could another individual principled figure like Edward Snowden or other US whistleblowers. As yet we simply do not know.

Almost no American citizens were exposed or embarrassed by the Panama Papers but close associates of the leaders of Russia and China, and even members of President Xi Jinping were revealed in them to have had secret accounts in Panama. The Russian government has angrily suggested that the leaks were a US-directed plot to embarrass President Vladimir Putin.

Apply the classic Roman legal and investigative concept of “cui bono” – “to whose benefit”– and the finger would certainly appear to point back at Washington: Panama since the US invasion of 1989 to topple President Manuel Noriega has been firmly back under the US security and intelligence umbrella.

It is certainly feasible to imagine that US Cyber Command (USCYBERCOM) which is inexorably growing in size, influence and power within the Pentagon power structure, was involved even indirectly. The US armed forces and security services have been so repeatedly caught flat-footed by cyber hacks of in recent years that one could certainly envisage them seeking to embarrass governments they believe to be behind some of those actions. Exposing the Panama Papers may have been meant as a warning or deterrence measure to send the message that governments authorizing such attacks on the United States can be hurt by such activities too.

However, if that were the case the classic principles of “blowback” and Professor Karl Popper’s “Law of Unintended Consequences” have ensured that the outcome was much more chaotic: Current and former major US allies have been embarrassed and implicated in the revelations as well.

Prime Minister David Cameron of Britain, arguably the most loyal ally the US has in the world, was enormously embarrassed by the revelations. So was Ukrainian President Petro Porochenko, whom the United States is desperately trying to prop up in Kiev. Indeed, given his corruption-mired and hugely unpopular government, he is far more likely to be seriously politically damaged, or even to be forced from office than the president of Russia.

Putin still enjoys extremely high popularity ratings. Porochenko’s are at rock bottom. Russia has been weathering the collapse in global oil prices and economic sanctions over the past two years surprisingly well. Ukraine’s corruption-plagued mess of an economy has plunged into the abyss since Poroshenko took over and the Ukrainian people know it.

A number of former Gulf and other Arab leaders were revealed to have kept Panama accounts. So were a smaller number of Israelis. Again, neither group seems to have been the primary target. Prominent former Pakistani leaders turned out to hold overseas accounts. Here, as in the case of Gulf nations, current and former US allies look more likely to be weakened and embarrassed by the revelations than the jihadist and Iranian-backed forces seeking to destabilize those countries.

Whoever was responsible for leaking the Panama papers, the overall effect will be to weaken confidence in governments around the world. Ironically, more transparent and open societies, like Iceland and Britain have seen more immediate outrage over the revelations more authoritarian ones. Badly-run governments like Ukraine are going to be at vastly more risk than stable, well-run countries such as the prosperous Gulf States and Saudi Arabia, or Russia, for that matter.

Most of all, the revelations serve notice that our increasingly high-tech world of seven billion people is getting more unpredictable and chaotic, and even the most expensive and sophisticated cyber-security systems are at risk from both huge national intelligence services and from individuals with grudges or high moral principles. Expect more revelations: Expect more chaos. The worst is yet to be.

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